How to Play Stocks and Bonds as Rates Rise

Cutwater Asset's Cliff Corso expects another good year for equities. Why he likes fixed-income plays in munis and some high-yield bonds.

Investors have been worrying about interest rates, which have been their good friend in recent years. But rates are poised to move higher; it's just a question of when. And that raises tough questions, most notably how to handle fixed-income portfolios. For insight, Barron's spoke recently with Cliff Corso, CEO and CIO of Cutwater Asset Management, an Armonk, N.Y., fixed-income shop that manages about $25 billion. Corso, 52 years old, who's been with the firm since 1994, maintains there's still money to be made, even with rates rising. Look for yield, he advises, adding that he likes certain leveraged loans,...